Israel’s military expertise finds a new home in driverless cars
Israel’s defence expertise is driving a tech boom for autonomous cars, report Tova Cohen and Steven Scheer, of Reuters.
TECHNOLOGY that has helped Israel’s military drive tanks, guide and intercept missiles, and keep its computer systems secure is being redeployed in the development of driverless cars.
Investment from firms seeking access to Israeli expertise in automated driving, much of it gathered by engineers during their conscription, is pouring into startups.
United States chipmaker Intel, German auto supplier Continental, Samsung, Daimler, Ford Motor Co and GM are among those to have bought startups or set up their own development centres in Israel. Inexperience in carmaking, distance from traditional auto centres and competition from other tech sectors for top staff are a challenge for investors.
Israeli autotech startups still raised almost as much as similar US companies last year.
‘‘A lot of the entrepreneurs are coming out of the Israel Defence Forces and they tend to be older than the traditional Silicon Valley [entrepreneurs],’’ Ford executive chairman Bill Ford jun said
‘‘They have a lot of judgement and wisdom. Particularly in areas like cybersecurity, there’s tremendous activity coming out of Israel.’’
The US attracts the most investment in the sector with companies raising $US1.2 billion ($NZ1.73 billion) last year, according to venture capital data provider CB Insights. Silicon Valley, Pittsburgh and Detroit are making efforts to be leaders in the driverless car era.
Israeli autotech startups are not far behind. They raised $US814 million last year, triple the 2015 level, and $US182 million in the first quarter of
2018, in line with last year’s pace, according to StartUp Nation Central.
Investment in Israeli autotech including venture capital, acquisitions and joint ventures, totalled $US3.5 billion in 2017, said Micki Shapira, a partner at law firm Weinstock Zecler and Co.
Startups elsewhere are making a push. Beijing has emerged as a hot spot, with strong backing from the Chinese Government.
But Israel’s innovation, often in elite military departments such as the cyber intelligence Unit 8200, wireless sensors, security, location finding and analytics software means it is well positioned to rival Silicon Valley. Cybersecurity expertise ensures the computers of driverless cars keep hackers out while radar, sonar, sensors and positioning systems are used to keep the cars on the road and stop them crashing into other vehicles or objects.
Cyber and frauddetection techniques were rooted in counterterrorism while breakthroughs in optical and sonar software might stem from missile defence, Evercore ISI analyst Chris McNally said.
Test drive
On an empty highway built by Israel’s Government to test selfdriving cars near Shfayim, north of Tel Aviv, a Samsungbacked startup called Imagry last month demonstrated its technology on a modified Kia Soul.
The fiveseater, equipped with cameras, infrared and artificial intelligence, kept a safe distance from another car.
Autonomy — without relying on the expensive laser detection system known as lidar which Waymo and GM use — has become a quest for the industry.
‘‘Cameras provide the most highresolution information and they are available and commoditised,’’ Imagry chief executive Adham Ghazali said.
His goal is to produce cheaper technology than lidar.
Another Samsungbacked startup, Innoviz, whose chief executive spent seven years in an elite technological unit of the IDF’s Intelligence Corps, wants to lower the cost of lidar rather than replace it.
Together with partner Magna it signed a deal last month to supply lidar to BMW.
With full autonomy a long way off, Ghazali aims to have 20 robotaxis operating in Israel and the US next year at ‘‘level 4’’ autonomy with a safety driver present.
Israel’s autotech sector started to take off in 2014, the year after Google bought mapping firm Waze for $US1.2 billion.
Another big step was when Intel spent $US15.3 billion on autonomous vehicle technology firm Mobileye last year and moved all its operations in the field to Jerusalem.
‘‘We were not known as a country that provides technology to the automotive industry and suddenly you have more than 500 different startups dealing with
. . . the automotive industry,’’ Mobileye cofounder Ziv Aviram said.
German auto supplier Continental bought cybersecurity firm Argus, whose chief executive was a captain in Unit 8200, for about $US430 million last year. Samsung’s Harman unit acquired cyber firm TowerSec for $US75 million in 2016.
RenaultNissanMitsubishi, VW, Porsche and Honda also have interests in Israel.
Competing for staff
The Government is keen to support the sector. It is building a simulator for test drives and working on regulation to balance safety with innovation, said Gil Shaki, head of energy, cleantech and transport at the Innovation Authority.
But there are still challenges for auto companies dealing with Israeli startups.
‘‘You don’t have tremendous knowledge about how to take a technology that’s in a nascent state and take it down the path ...to automotive grade,’’ said Glen De Vos, chief technology officer of Aptiv, a major automotive supplier that is developing safety and autonomous driving systems.
The startups were sometimes surprised it could take five years to get a product launched on a car, and a decade to achieve significant sales volume, he said.
Distance from other car centres could also be a problem.
A challenge for the startups is the competition for staff with firms such as Google or Intel.
The Government forecasts a shortage of 10,000 engineers and programmers over the next decade in the tech sector, which already employs 270,000.
Interest in the sector had pushed up valuations, said Yifat Oron, chief executive of Bank Leumi’s tech arm LeumiTech.
‘‘There’s always overexcitement as happened with the cybersecurity sector,’’ she said.
‘‘Maybe it will be corrected a little but we can’t see this happening in the near or midterm.’’